A. A Southern town, circa 1860 (just before the Civil War), and its Bodehouse Saloon.

Q.Where is it supposed to be on the show?

A.In Louisiana

Q.
When did we see it on the show?

A.In Episode 5, of the final Season 7 ("Lost Cause").

During a party at Sookie's, Bill has a flashback of his days as a human, just before the Civil War,

We
see what appears to be an Old West frontier town, although we are told
that it is in fact a town in Louisiana, probably Bon Temps itself.

Bill,
dressed in the clothes of the period, is walking down the busy street,
when he meets a slave named Minus, and greets him warmly. He asks
him what is going on with the big crowd at the Bodehouse Saloon.

Just them, a rather arrogant man, named Charles Dupont, pulls up in his carriage and treats Minus like a servant. Charles tells Bill that "Lincoln has called his soldiers", and war is about to start.

Charles seems happy about that, bragging that, given their social standing, they will both be made officers. Bill is not pleased.

Inside
the saloon, Charles mounts the stairs and delivers a rousing speech
about how they must go to war to defend their rights against the North.
The crowd in the saloon eats it up.

A
worried Bill stands and warns them that they are outmatched, that the
North is better armed, and that war will only destroy their town.

He's
right, but the crowd is in no mood to hear it. The bartender tells Bill
to leave the saloon, that he has no room for "Northern sympathizers".

The
location:Bill's Civil War Flashback

Q.
What is it actually, in real life?

A.An Old West set at a movie ranch.

Q.
Where can I find it in real life?
A.This is the Main Street of the Western town at Melody Ranch, located at 24715 Oakcreek Ave, in Newhall, CA.

That's about six miles southeast of Six Flags Magic Mountain, in the foothills of the Santa Clarita area.

Melody Ranch, a 22-acre movie ranch, had its start back in the Silent
Movie days of 1915, when Western shorts were all the rage, and Monogram
Studios shot hundreds of them here.

In 1952, they sold the ranch
to singing cowboy Gene Autry, who named his popular radio show and
one of his movies "Melody Ranch". In the 1990's, it was
sold again, and its Old West Main Street (which had been destroyed in a
fire in 1962) was restored.

Over the years, they have filmed a zillion Western movies and TV shows
here at Melody Ranch, including "High Noon", "Stagecoach", "The Lone
Ranger", "Wyatt Earp", "Gunsmoke", "Hopalong Cassidy", "Annie Oakley",
"Rin Tin Tin", "The Cisco Kid", "Deadwood" and "Django", with stars
that included the likes of John Wayne, Gary Cooper, Tom Mix, Roy Rogers, William S. Hart, and of course, Gene Autry.

The ranch is occasionally open for public tours, and for the annual Cowboy Festival in April.
Here is a matching photo of Main Street at Melody Ranch:

Q.
How the heck did you figure out where it was?

A. I did a page about Melody Ranch
years ago for my Seeing-Stars site. So I was pretty sure this was
it when I saw the scene. I double-checked by going to the Melody
Ranch website and comparing photos there to the buildings seen in the
episode, and was able to make a perfect match (as you can see above).